To have a superior performance, you must rely on two things: "break even" and "hit a home run"! -Stanley Zuckenmiller
Then I want to introduce a person who is not familiar to domestic investors, but is one of the most important people on Wall Street. Stanley Zuckenmiller, former chief fund manager of Quantum Fund, successfully planned the Southeast Asian financial storm that shocked the international community in 1997. 1998, he once again made a "century gamble" with the Hong Kong government with huge sums of money. Although he ended in failure, he let the financial community know that he was only in his forties. Moreover, this book is the first time to publish a photo of Stanley Drakenmiller in China.
Zhu Ken Miller's background is completely different from Soros's Hungarian Jewish background. He is a native of Philadelphia, USA. He received a degree in economics and English literature from BowdoinCollege in Maine, and then went to the University of Michigan to study for the Graduate School of Economics. However, he was bored to death because the course was too theoretical and quantitative and divorced from the real world. When Stanley Zuckenmiller decided to give up graduate school and go straight into the real world, he worked as a stock analyst at Pittsburgh National Bank for less than a year and was promoted to the head of stock research. Stanley Zuckenmiller loves his job very much. He entered the company at 6 am and didn't leave until 8 pm. At first, Stanley Zuckenmiller wrote a whole report on every feature of an industry or a stock. Before addressing the Committee, the report must be submitted to the research director. Stanley Zuckenmiller once handed in a report on banking, and he was very proud of his work. But the research director said to him after reading it: "This report is useless. What makes stocks go up and down? " His comments greatly stimulated Stanley Zukmiller. After that, Stanley Zuckenmiller focused his analysis on finding and confirming the factors closely related to the rise and fall of stocks, instead of listing all the basic factors.
1. Most of the key factors are related to earnings, especially banking stocks. The performance of chemical stocks varies greatly. In this industry, the key factor is chemical production capacity. The best time to buy chemical stocks is when there are a lot of stimulating factors in the chemical industry. On the contrary, the ideal time to sell chemical stocks is when the chemical industry announces the establishment of a large number of new chemical plants, but the income of chemical stocks has not yet fallen. This is because any development plan means that the company's income will decrease after two or three years, and the stock market will always respond to this development in advance.
2. Another creed that helps to judge whether a stock is going up or down is technical analysis. Stanley Zuckerberg attaches great importance to technical analysis, and Stanley Zuckerberg is more willing to accept technical analysis than others in the department. Even Stanley Zuckenmiller's boss, many colleagues regard him as a monster, because he likes to collect all stock market charts, but Stanley Zuckenmiller thinks technical analysis is quite useful.
Two years later 1980, 28-year-old Stanley Zuckenmiller left the bank and started his own financial management company-Rigson Asset Management Company. From the beginning, it did a good job, seizing the momentum of soaring stocks of low-priced small companies. By the middle of 198 1, the stock market had reached the top of the value zone and the interest rate soared to 19%. Obviously, it's time to sell the stock. Stanley Zuckenmiller converted half of his shares into cash. At that time, Stanley Zuckenmiller thought it was a surprising move. Results In the third section of 198 1, Stanley Zuckenmiller erased all previous achievements. Because the other half of the shares continue to be held, the resulting losses obliterate all the original good performance. The reason is that the bank's standard investment procedure is always almost full investment. Although Stanley Zuckenmiller no longer works for the bank, he obviously still retains some bank thinking ways. Stanley Zuckenmiller's stock market in June of 198 1 was absolutely bad and correct, but the result was still a loss of 12% in the third quarter. Say to your partner, "This is a crime! Our pessimistic view of the market has never been so strong, but it ended in failure in the third quarter. " After that incident, Stanley Zuckenmiller changed his investment philosophy. As long as he feels that the market is no longer good, he will often 100% withdraw cash and turn it into cash.
From 65438 to 0986, Zuckerman Miller was employed as a fund manager by travers Fund. Traverse Fund Company still allows Stanley Zuckenmiller to continue to manage his Rigson Fund. When he joined the Traverse Fund, his management style has changed from a traditional single stock portfolio to a compromise investment strategy of combining bonds, foreign exchange and stocks, and he has flexibly carried out diversified transactions of buying long positions and selling short positions in these markets. Traverse Fund was fascinated by his market talent. Under his leadership, he founded seven funds to be managed by him, and with his own 1 fund, there were as many as eight. The most famous one is the Active Strategic Investment Fund, which has been the best fund in the fund industry from its establishment (1March, 987) to the departure of Stanley Zuckerman Miller from Traverse in August, 65438+August, 0988. Finally, he was eager to cooperate with Soros. Because their trading activities were similar in temperament, he bid farewell to travers and went to work in Soros Management Company. He thinks Soros is the greatest investor of his time. Soon after, Soros handed over his fund management rights to Stanley Zuckenmiller, because Soros decided to help the closed economies of the former Soviet Union and Eastern Europe reform.
When Soros managed the Quantum Fund from 1969 to 1988, the average annual return of the fund was 30%. Zuckerman Miller increased his annual return to 40% in the first five years after he took over. (The annual returns from 1989 to 1993 are 3 1.6%, 29.6%, 53.4%, 68.6% and 72% respectively).
199 1 At the beginning of the year, Zuckerman Miller established a short position of $3 billion in the US and Japanese stock markets, and also made a large number of short positions in the US and global bond markets. However, before the end of 1 the United States launched the "Desert Storm" action against Iraq, he turned all his short positions of up to $6 billion into long positions. After the war broke out, his view was proved to be correct. His most successful investment was in the bond market and foreign exchange market of12 billion dollars in Europe, the United States and Japan later that year. After the bonds rose sharply in August and September due to the weak economy, he greatly increased the income of the quantum fund, and the yield in that year increased to 53%. 4%, the net assets at the end of the year reached 310.57 billion US dollars.
Perhaps what Soros benefited Zuckerman Miller the most is that "it doesn't matter whether the operation direction is right or wrong, what matters is how much you earn when the direction is right and how much you lose when the direction is wrong". Soros's criticism of Zuckerman Miller is rarely a long-short mistake, but that he did not maximize profits in the right direction.
Since 1993, the portfolio of Soros's funds has exceeded $50 billion. In addition to directly managing quantum funds, Zuckerman Miller is also responsible for monitoring the performance of other funds, but he still inherits Soros's investment philosophy as a whole. Even if Soros announces his retirement immediately, it will not affect the long-term operation of these hedge funds.
Stanley Zuckenmiller's investment success can be summarized in two ways, but it is actually one, which is emphasized in the technical article "Fund Management, Two Secrets":
1. Ask for money, don't lose face, control risks-dare to admit your mistakes.
2. Dare to make profits-position management,
Don't lose face by asking for money-dare to admit your mistakes.
1987 before the stock market crash, the first half of that year was very good. Stanley Zukmiller was bullish on the stock market, and its share price soared. Each fund has increased by about 40% to 85%. Earlier that year, many brokers made a profit because they got a lot. But Stanley Zuckenmiller's philosophy is that if you profit from radicalism, you should be more radical, which is also emphasized by Mr. Soros. Because you made a lot of money at the beginning of this year, it is a good opportunity for you to seize it boldly. Stanley Zuckenmiller felt that he had the capital to compete with the market because of his smooth work at the beginning of this year. Stanley Zuckenmiller knew that the bull market would end, but he just didn't know when. Similarly, because the market is often seriously over-developed, Stanley Zuckenmiller thinks that when the bull market really ends, he may have run far away, which is amazing. In June, Stanley Zuckerberg saw several factors: the valuation of stocks has been extremely excessive; Dividend income decreased by 2.6%; The price-earnings ratio has been maintained at a historical height; The Federal Reserve has been tightening monetary policy for some time. Finally, technical analysis shows that the stock market is about to die-that is, the power of the market is concentrated on large-cap stocks and high-priced stocks, and a large number of other stocks are far behind. This factor made the stock market soar like a jet. Stanley Zuckenmiller changed his role. In fact, he just sold stocks short. In the next two months, the market was in great turmoil. Stanley Zuckenmiller has been going against the market and its share price is still rising.
Over the next few months, the market has been hovering at the top, and Stanley Zach Miller has been holding short positions. By 1987, 10, 16, the Dow Jones index had fallen to nearly 2200 points, once reaching the top of 2700 points. Stanley Zuckenmiller not only made up for the loss of short selling, but also restored the previous performance, almost making this year a big profit year. However, this year was a year when Stanley Zuckenmiller made a serious mistake and almost caused a tragic result. The chart shows strong support around 2200, which is the bottom of the transaction since the first half of 1986. Because Stanley Zuckenmiller made a lot of money as a cow in the first half of this year, he has enough strength. Later, I made a lot of money by shorting, so I closed my position on Friday afternoon of June198710/6, and became a long position. I used 130% long position.
At that time, after the stock market closed on Friday afternoon, Stanley Zuckenmiller happened to have a chat with Soros. Soros said that he wanted to show Stanley Zuckenmiller a research report by Paul Dioto Jon. Stanley Zuckenmiller went to his office, and he took out the analysis report made by Paul a month or two ago. Research shows that the past history of the stock market shows that once it falls below the upward parabola, the stock market will accelerate its decline, which is exactly the case this time. The report also shows that the stock market of 1987 is closely related to the stock market crash of 1929, which means that we are on the verge of a stock market crash. When Stanley Zuckenmiller came home that night, his stomach was upset. Stanley Zuckenmiller realized that he had screwed up and the stock market was about to crash! Stanley Zuckenmiller decided that if the opening on Monday was still above the support line, that is, the Dow Jones index opened about 30 points lower and did not rebound immediately, he would admit the loss and cut his position. Unexpectedly, the market opened lower by more than 200 points on Monday, and Stanley Zuckenmiller knew that he still had to pay for it and leave. Fortunately, the market rebounded shortly after the opening, which gave Stanley Zuckerberg a chance to close all his positions and sell them short again. Then the market continued to plummet.
This is a useful lesson: if you find a mistake, you should correct it immediately. If he is narrow-minded, keeps his original position in the face of unfavorable evidence, or delays waiting for whether the market can recover, he will suffer huge losses. This ability to accept the painful facts without hesitation and respond decisively is the sign of a great investor.
Dare to make profits and control risks-position management
Stanley Zuckenmiller's long-term performance far exceeds the industry average. The reason is that george soros's idea has been adopted: the only way to gain long-term benefits is to care for capital and manage the base well. When you make a profit, you should strive for progress. Once profits reach 30% to 40%, many fund managers tend to record trading profits this year. In the rest of the year, they are very cautious in trading, so as not to destroy the good annual rate of return that has been achieved. If you really want to get excellent long-term high returns, you must work hard. After achieving 30% to 40% return, if you still have confidence, you should strive to achieve 100% return. If we can connect some years close to 100% in series and avoid loss years, we can really achieve excellent long-term high returns.
The most meaningful thing Stanley Zuckenmiller learned from Soros is not to find out whether he is right or wrong, but to find out how much he can earn when he is right and how much he will lose when he is wrong. That's all that matters. Soros once criticized Stanley Zuckenmiller once or twice. He was right about the market, but he didn't have the energy to make full use of the opportunity. For example, shortly after Stanley Zuckenmiller started working for Soros, Stanley Zuckenmiller was not optimistic about the dollar, so he shorted the dollar in large quantities and bought Mark's position. These short positions began to benefit him, and Stanley Zuckenmiller was very proud. Soros came to Stanley Zuckenmiller's office to discuss the deal.
He asked Stanley Zuckenmiller, "How big a position did you build?" Stanley Zuckenmiller replied, "A position of $6,543.8+$0 billion." He disdainfully asked, "Do you call this a position?" This sentence has become a classic on Wall Street. When you do something right, for Soros, he will think that your position is still not enough. He encouraged Stanley Zuckerberg to double his position, and Stanley Zuckerberg did the same. As a result, the transaction became extremely favorable and the profit was amazing! Soros taught Stanley Zuckenmiller that once you are extremely confident in a transaction, you should dare to seize the opportunity by the throat. This requires the courage to be a "pig" and dare to seize profits. (Ittakescouragetobeapig).
1997 after the southeast Asian financial turmoil, Stanley Zuckenmiller chose the Japanese financial market as the next target according to various economic data and materials of 1998. However, because Soros has a special complex for socialist countries (supporting the subversion of Hungary and the former Soviet Union), he mistakenly analyzed China's firm stance and situation of supporting Hong Kong, and chose Hong Kong to go to war instead of the Japanese market with the weakest emotion. At the same time, it shows Stanley Zuckenmiller's rational investment mentality (the yen plunged nearly 40% later). In the recent China stock market, Stanley Zuckenmiller dared to make a big profit when the big market broke out, and dared to decisively lighten his position when he misread the market, which is worthy of investors' reference.